Thought leadership for banking and financial services professionals

Why banks must find the right mix of physical and digital channels

Posted on July 5th, 2017

Finding the right balance between physical and digital channels and approaches to banking is crucial for providers wanting to guarantee the highest possible levels of satisfaction for their customers – particularly in the millennial age group.

That point was underlined in the latest US Retail Banking Satisfaction Study from J.D. Power, which emphasized that the branch and physical channels still have a key role to play in our modern era of mobile and digital banking.

Offering choice and certain standards of service across all channels looks set to become increasingly important as banks compete to retain existing customers and win new business.

Combining the physical and the digital

Banks today are faced with the challenge of finding the right balance between the digital services that so many customers now expect, and the physical and branch-based activities that clearly still play a significant part in the retail banking experience.

J.D. Power’s research findings showed that, in the US, mobile banking penetration is higher than ever, but this has not stopped people from using branches, with 71 percent of all bank customers having paid a visit to a branch an average of 14 times in the past year. Surprisingly, the millennial age group (those born between 1982 and 1994), averaged only three fewer visits, clearly showing the need for branches, even for millennials.

Another surprising outcome of the survey was that the levels of customer satisfaction were higher among people who had paid a visit to a branch during the past year than among those who had not.

Jim Miller, senior director of banking at J.D. Power, said: “There is no question that banks need to get the digital experience right in order to attract and retain customers, however, the branch continues to play an important part of the overall customer experience. The trend is particularly noteworthy among millennials who represent the future of banking, and consistently demonstrate that overall satisfaction is higher among customers who use both the branch and mobile banking. Banks can’t choose between the two channels; rather, they must focus on how the two work together.”

Optimizing the physical banking experience

Maintaining a positive customer experience begins with enabling successful transactions. The majority of transactions conducted at the ATM are for cash withdrawal purposes. What are you doing to ensure that the cash you place in the ATM is sufficient and is not costing you an arm and a leg?

Well one way to resolve this dilemma is to deploy an effective cash supply management solution that uses sophisticated mathematical algorithms to manage the cost/demand question. Deploying solutions to ensure you have the right distribution of cash across your branches and self-service network will guarantee optimum availability for customers and reduce the risk of ATMs holding excess cash that could be invested elsewhere.

When combining a cash management solution with cash recycling devices, for instance, both the bank and the customer will benefit from this perfect union of HW and SW. You will improve the customer experience through maximized availability, while reducing ATM replenishment and cash-in-transit costs.

Furthermore, branch transformation tools such as self-service kiosks and deposit ATMs can give customers more control and free up staff to concentrate on sales activities or providing advice for more complex transactions.

The banking industry today is defined by unprecedented choice and diversity, not only in terms of how customers go about managing their money but also in how banks design and deliver their services. The most successful providers will be those that are able to find the right combination of physical and digital channels, with the necessary tools and technologies in place to ensure customers receive the level of service they have come to expect.

Image: iStock/ipopba

Written by Cleopatra Mavredis

Cleopatra is NCR’s Global Marketing Manager for Channel Solutions and has more than 20 years of experience in the ATM industry. NCR’s channel solution portfolio is comprised of APTRA Vision, Inetco Insight and OptiSuite solutions.